Croatia is expected to soon adopt its first law regulating the work of debt collection agencies. The adoption of this law has been a recommendation in several annual reports of the Ombudswoman to the Croatian Parliament, which have warned about violations of the rights of indebted citizens due to the insufficiently regulated and supervised operations of these agencies.

Therefore, the Ombudswoman, Tena Šimonović Einwalter, welcomes the preparation of the Draft Proposal of the Law on the Method, Conditions, and Procedure for the Servicing and Purchase of Claims, which will soon be on the agenda of the Croatian Parliament.

The Ombudswoman also welcomes the fact that the Ministry of Finance has adopted her suggestions made during the public consultation in August. As a result, it will be completely prohibited to enter a debtor’s home without their explicit written consent, as well as to engage in persistent and unwanted communication with them. Exceptions to this will be subject to misdemeanor liability. Considering citizens’ complaints, this is especially important in terms of protecting the right to respect for their private and family life, home, and correspondence, as guaranteed by Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

It is also positive that the Draft Proposal of the Law regulates the operations of telecommunication operators, utility companies, and others who hold claims against citizens, which has also been highlighted as a need in the Ombudswoman’s annual reports to the Croatian Parliament.

 

Ban on Home Visits Without Consent, as Well as Persistent and Unwanted Communication

This law will prescribe what constitutes aggressive business practices, which will include, among other things:

  • visiting consumers at their homes while ignoring their request to leave or not to be visited again
  • persistently and undesirably communicating with the consumer via telephone, fax, in writing (by post, e-mail, SMS), or by any other means of remote communication

However, under the provisions presented during the public consultation, such practices would be permitted “in cases and to the extent justified for the purpose of enforcing contractual obligations as provided by law.”

These exceptions have been removed at the suggestion of the Ombudswoman, who emphasized that she does not find any situation or extent in which it would be justified, in this context, to enter someone’s home without an invitation and ignore a request to leave, or to persistently and undesirably communicate with someone by phone, SMS, or similar. Claims are enforced through procedures conducted by courts and public notaries, in the manner prescribed by the Enforcement Act.

At the Ombudswoman’s suggestion, these exceptions have also been removed from the regulation of communication between credit purchasers and credit servicing providers with the debtor, as well as between purchasers of other claims and servicing providers of such claims with the debtor.

Fines for violating this prohibition are set to range from 2,000 to 30,000 euros.

 

What Do Citizens Say in Their Complaints?

Citizens have reported to the Ombudswoman that debt collection agencies often infringe on their right to privacy and personal and family life. Some complaints indicate that by assigning claims to these agencies, citizens become victims of intrusive behavior and harassment, which threatens not only their privacy but also their dignity.

In their complaints, citizens state that agency employees, among other things, come to the doors of their homes and neighbors, call them frequently, and so on.

On the other hand, the Constitution of the Republic of Croatia guarantees every citizen legal protection of their personal and family life, dignity, reputation, and honor. According to the European Convention for the Protection of Human Rights and Fundamental Freedoms, everyone has the right to respect for their private and family life, home, and correspondence.

The Ombudswoman participated in the public consultation process to contribute to ensuring that this law is of the highest quality and achieves the best possible impact. All her comments from the public consultation on the Draft Proposal of the Law on the Method, Conditions, and Procedure for the Servicing and Purchase of Claims can be found here.Top of Form

 

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